Employment Status: Court of Appeal Finds That Courier Was a 'Worker' and Not Self-Employed

This is the latest in a long line of cases examining the employment status of couriers, delivery drivers and taxi drivers who are engaged through apps. The question of employment status is important because those who are self-employed have limited rights as set out in their contracts whereas 'workers' are entitled to basic rights including statutory minimum paid holiday, statutory rest breaks, statutory minimum notice and the right to receive the national minimum wage.

Personal Performance

A key distinction between 'workers' and the self-employed is whether personal performance is required.  If so, the individual is more likely to be a 'worker'. If the individual is able arrange for a substitute to perform their services and has an unfettered right to choose that substitute, the individual is more likely to be self-employed or an independent contractor.

This case analysed the extent of the individual's right to arrange a substitute.

The Background

Stuart Delivery developed a technology platform which connects couriers with clients via a mobile app. Couriers could either decide which individual jobs to take, or could sign up for one or more time slots on the mobile app which would commit them to being available in a certain area at a certain time during which they would be paid a minimum of £9 per hour. A courier who signed up for a slot could request to release it via the app and therefore make their slot available to other couriers, but if no other courier accepted it, the original courier was liable for completing it (incurring penalties if they failed to do so).

Mr Augustine worked as a courier for Stuart Delivery. He complained to the employment tribunal that he was entitled to, amongst other things, notice pay and holiday pay and argued he was a 'worker'. Stuart Delivery asserted that Mr Augustine was self-employed. 

The Employment Tribunal and Appeal Tribunal

The tribunal found that Mr Augustine was a 'worker'. Although he had the right to request to release a time slot, his right was not an unfettered right of substitution. He could not choose who undertook the time slot in his place and if no one offered to take the slot Mr Augustine would still be liable for completing the slot. A courier who signed up for a slot would therefore be obliged to perform the work personally or face real risk of negative consequences for failing to do so.

The Employment Appeal Tribunal upheld this decision finding that Mr Augustine did not have a right to substitution - all he had was the right to hope that someone in a limited pool of potential replacements would relieve him of his personal obligations.

The Court of Appeal

Stuart Delivery appealed to the Court of Appeal. The Court of Appeal held that the limited right to notify other couriers of a desire to release a time slot was not in reality a sufficient right of substitution  to remove Mr Augustine's personal obligation to perform the work personally. The appeal was therefore dismissed.

Best Practice

The courts at every stage of this case referred to the 2018 Pimlico Plumbers case. In the Pimlico Plumbers case, the Supreme Court identified five categories of substitution:

• An unfettered right to substitute another person to do the work. This is inconsistent with an obligation to do work personally and is therefore indicative of self-employment.
• A conditional right to substitute another person. This may or may not be inconsistent with personal performance depending upon the precise contractual arrangements and, in particular, the extent to which the right of substitution is limited or occasional.
• A right of substitution which only applies when the individual is unable to carry out the work. This will usually be consistent with personal performance and is therefore indicative that the individual is a 'worker'.
• A right of substitution which is only limited by the need to show that the substitute is as qualified as the contractor to do the work. This will usually be inconsistent with personal performance and is indicative of self-employment.
• A right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent. This will be consistent with personal performance and is indicative that the individual is a 'worker'.

The Court of Appeal in Stuart Delivery warned against seeking to apply these categories too rigidly. Nevertheless they will be helpful to employers in considering the extent of substitution that they are willing to permit in new contracts and what impact this will have on an individual's employment status.

It may also be a helpful framework for reviewing the self-employment arrangements currently in place. Do they include a right to substitution? If so what is the extent of that right? Is there a risk the contractors are in fact 'workers'? How can that risk be addressed? 

If you have any concerns about worker or employee status, please contact Nick Murrell in our Employment Law team on 0117 314 5627, or complete the form below.